Annual Results Presentation For the year ended 30 June 2015 - - PowerPoint PPT Presentation

Annual Results Presentation

For the year ended 30 June 2015

2

Highlights

29.5 36.1

FY 2014 FY 2015 R'billion

+22%

Revenue

7.4 8.4

FY 2014 FY 2015 R'billion

+14%

Operating profit

1 064 1 219

FY 2014 FY 2015 Cents

+15%

Normalised headline EPS

188 216

FY 2014 FY 2015 Cents

+15%

Distribution to shareholders

3.8 4.8

FY 2014 FY 2015 R'billion

+26%

Cash generated from

• perating activities

29.8 30.0

FY 2014 FY 2015 R'billion

+1%

Net borrowings

3

Record of unbroken growth

20 34 47 63 79 104 138 185 210 231 389 487 555 660 837 1064 1219

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Cents

(Normalised) headline earnings per share since listing

4

Abridged Group statement of comprehensive income

Cost of sales (18 873) (15 793) Gross profit 17 254 13 722 26% Net operating expenses (8 317) (5 907) EBITA 8 937 7 815 14% Amortisation (487) (390) Operating profit 8 450 7 425 14% Net funding costs (1 912) (1 068) Profit before tax 6 538 6 357 3% Tax (1 339) (1 351) Profit after tax 5 199 5 006 4% Basic earnings per share (EPS) 4% 1097.9 cents 1139.8 cents Normalised HEPS 15% 1064.2 cents 1219.1 cents R’million Change Net revenue 36 127 29 515 22% FY 2014 FY 2015 Headline earnings per share (HEPS) 13% 1016.3 cents 1149.9 cents

5

Gross revenue bridge

38 046 31 433 5 843 410 1 156 24 5 000 10 000 15 000 20 000 25 000 30 000 35 000 40 000 FY 2014 International Asia Pacific South Africa Sub-Saharan Africa FY 2015 R'million

• 2 000

4 000 6 000 8 000 10 000 12 000

South Africa Sub-Saharan Africa Asia Pacific Europe CIS Latin America Hyperinflationary economy Rest of the World

R'million FY 2014 FY 2015 +16% +1%

• 3%

+44%

• 10%

+45% +143%

6

Gross revenue by customer geography

7

Operating margins

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% Group Sub-Saharan Africa Asia Pacific South Africa International

Normalised EBITA margin %

FY 2014 FY 2015

8

Net funding costs

R’million FY 2015 FY 2014 Net interest paid (1 450) (1 018) Debt raising fees on acquisitions (142) (155) Net foreign exchange (loss)/gain (479) 81 Foreign exchange gain on settlement of transaction funding liability

• 249

Fair value losses on financial instruments (1) (86) Notional interest on financial instruments (175) (131) Net hyperinflationary adjustments 335 (8) Total (1 912) (1 068)

9

Reconciliation of earnings per share

Cents FY 2015 FY 2014 Change Basic earnings per share (EPS) 1 139.8 1 097.9 4% For the year ended 30 June Net impairments 37.2 23.6 Net profit on sale of assets (27.1) (105.2) Headline EPS (HEPS) 1 149.9 1 016.3 13% Restructuring costs 21.6 6.5 Capital raising fees 28.9 32.0 Transaction costs 18.7 63.6 Foreign exchange gain on transaction funding

• (54.2)

Normalised HEPS 1 219.1 1 064.2 15%

10

Revenue analysis of major currencies

Avg rate for year to June 2014 Avg rate for year to June 2015 Variance Revenue year to June 2015 R'm Rate benefit/ (loss) in R'm Rand/ EUR 14.20 13.61 4% 8 472 (367) Rand/AUD 9.55 9.48 1% 6 684 (55) Rand/USD 10.44 11.47

• 9%

3 269 295 Rand/VEF 1.25 1.93

• 35%

2 383 838 Rand/MXN 0.80 0.80 0% 1 308

• Rand/RUB

0.31 0.23 35% 675 (213) Rand/BRL 4.56 4.26 7% 735 (50) Rand/JPY 0.10 0.10 4% 432 (18) Rand/GBP 17.10 18.01

• 5%

766 39 Rand/PHP 0.24 0.26

• 8%

233 19 Rand/NZD 8.68 8.77

• 1%

203 2 Rand/ZAR 1.00 1.00 0% 7 955

• 33 115

490 Other currencies 3 012 Total Revenue 36 127

11

Key currency movements vs USD – Jul 2014 to Jun 2015

0.40 0.50 0.60 0.70 0.80 0.90 1.00 1.10 1.20 EUR AUD MXN BRL RUB ZAR

12

Working capital and cash generation

R’million FY 2015 FY 2014 Net working capital 14 327 13 018 Net working capital excluding Oss 10 591 9 842 Working capital as % of revenue 40% 37% Less: Attributable to Oss

• 8%
• 5%

Working capital excluding Oss as % of revenue 32% 32% Cash generation FY 2015 FY 2014 Operating cash flow per share 1060.3 cents 841.1 cents Normalised operating cash flow per share 1100.7 cents 857.0 cents Normalised operating cash flow to normalised earnings conversion rate 90% 81%

13

PPE capital expenditure

632 652 470 667 1 329 1 593 168 215 253 295 434 552

• 200

400 600 800 1 000 1 200 1 400 1 600 1 800 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 R'million Capital Expenditure Depreciation

14

Borrowings

R’million FY 2015 FY 2014 Opening balance 29 765 11 058 Cash flow from operating activities (4 839) (3 836) Capital expenditure 2 417 2 029 Proceeds from sale of assets (3 648) (1 005) Acquisitions of businesses/brands 2 284 19 764 Distribution to shareholders 858 716 Other 667 236 Exchange rate effect 2 544 803 Closing balance 30 048 29 765 Year ended 30 June South Africa 32.5% Asia Pacific 16.6% International 50.9%

Net borrowings of R30.0 billion

Currency Balance Fixed rate Floating rate ZAR million 11 938 10% 90% AUD million 405 49% 51% USD million 1 909 49% 51% Group in ZAR million 38 714 38% 62% Gross debt as at 30 June 2015

15

Borrowings

25.5 13.2 8.7 30.0

• 5 10 15 20 25 30 35

Non-current Current Cash Net borrowings R'billion

Analysis of R30.0 billion net borrowings

Debt denomination ZAR USD AUD Blended interest rates for borrowings as at 30 June 2015 Weighted average rate p.a. 7.00% 2.75% 4.60% Key indicators FY 2015 FY 2014 Interest cover ratio 6.2x 7.8x Net borrowings/EBITDA 3.1x 3.1x Gearing 47% 51% Net borrowings R30.0 billion R29.8 billion

16

• Restricted currency flows
• Wide range of applicable currency translation – from VEF6.30 = 1USD to VEF600 = 1USD
• Aspen has translated Bolivars at VEF6.30 = 1USD – the official rate for medicines and infant

nutritional products

• During the year to 30 June 2015 Aspen received USD18 million at this rate
• At 30 June 2015 Aspen Venezuela had:
• USD47 million (@ 6.30) of intergroup liability
• USD70 million (@ 6.30) of monetary assets
• New regulation providing for advance settlement of imports of infant nutritionals is positive
• R2.7 billion of revenue in 2015 recognised

Exposure to Venezuela

17

International sector now 48% of total sales SA 23% of total sales

• International sales +12% (H2:H1)
• South African performance sustained
• Australia -18% (H2 2014)
• Sub-Saharan Africa under currency pressure and supply constraints

Group overview

Group

R’million FY 2015 FY 2014 % change International 18 157 12 430 46% South Africa 8 608 7 451 16% Asia Pacific 8 504 8 799

• 3%

Sub-Saharan Africa 2 777 2 753 1% Total 38 046 31 433 21% Revenue by customer geography*

* Classification by customer geography is based on the destination of sales made and as a result may differ from reported by business entity

18

• Sales growth largely driven by annualised effects of
• Merck, GSK and IMF acquisitions
• Organic growth of base portfolio
• Sales decline in North America
• USD300 million disposal of Arixtra in 2014 base

Revenue analysis

International

R’million FY 2015 FY 2014 % change Europe CIS 10 456 7 200 45% Commercial sales 6 902 3 958 74% FDF and API sales 3 555 3 243 10% Latin America 6 128 3 485 76% North America 894 1 081

• 17%
• Commercial sales

599 737

• 19%
• API sales

295 345

• 14%

Middle East North Africa 679 664 2% Total 18 157 12 430 46% Revenue by customer geography

19

• Europe CIS +6% (H2:H1)
• Anticoagulants up 13% on H1
• Up 19% in Euros
• Mono Embolex inclusion offset by currency erosion

− Rouble alone 20% down vs Euro

• Other products up 42%
• Merck products growth as now annualised
• Existing products up 18% (24% in Euros)

Europe CIS

International

R’million FY 2015 FY 2014 % change Commercial sales 6 902 3 958 74%

• Anticoagulants

4 558 2 310 97%

• Other brands

2 344 1 648 42% API sales 3 027 2 729 11% Finished form sales 528 513 3% Total 10 456 7 200 45% Revenue by customer geography

20

• Sales operations in 45 countries
• 22 with direct Aspen representation
• 20 languages
• 516 reps

− Over 100 more than prior year − Most for Mono Embolex

Europe CIS – Transformation into an independent operating region

International

959 3 958 6 902

• 1 000

2 000 3 000 4 000 5 000 6 000 7 000 8 000 FY2013 FY2014 FY2015

Commercial revenue in R'million

Acquisition of MSD product portfolio, Arixtra and Fraxiparine Acquisition of Mono Embolex

21

• LWMH growth in volume (+1%) and value (+3%)
• Hospital sales not accurately captured by IMS

− Total market value is understated

Europe CIS – LWMH market value as at 31 December 2014

International

Sanofi 58% Aspen* 18% Leo 10% Pfizer 10% Other 4%

Europe CIS market USD3.3 billion

Source: IMS December 2014 * Includes Seleparina – owned by Aspen licensed to Italfarmaco

22

Russia – June 2015 hospital injectables anti-thrombosis market

International

Source: IMS Health MAAS, June 2015

• Aspen has now overtaken Sanofi

23

An offering unmatched by any other injectable anticoagulant company

• Only global offering of such a broad range of specialist injectable anticoagulants
• Providers have advantage of a single supplier that addresses broad clinical needs
• Bodyweight independent application
• Local sensitiveness to sodium salt formulations - less painful to inject
• Patients not in favour of biological raw materials
• Only injectable anticoagulant with1A recommendation for NSTEMI-ACS (cardiologists)
• Therapy solution for H.I.T.
• Only once daily LMWH product for deep vein thrombosis
• Unique portfolio underlines Aspen’s commitment to be the key player in this sector

Aspen’s anticoagulant portfolio presentation across Europe CIS

International

24

• Strategic focus on oncology with Fraxiparine
• Longer usage periods for safety reasons
• Existing onco portfolio growing
• Fraxodi – the only once daily LMWH product for deep vein thrombosis
• Focused promotional strategy with Arixtra in the Cardiology therapeutic area
• Arixtra has the 1A recommendation (best)
• Acquisition of Mono Embolex in Germany
• Transitioned and full promotion from August 2015
• Weight independent dosing
• Leverage off the synergies between thrombosis and female health/oncology portfolios
• Thrombosis reps call on gynaecologists
• Need LMWH in caesarean
• Has fuelled growth of existing portfolio

Europe CIS – Broad basket offers opportunity for targeted positioning

International

25

• Therapeutic area performing
• In spite of introduction of orals
• Barriers to entry high
• API – biochemical
• FDF – sterile pre-filled syringes
• Commercial

− Need volumes − Price already very low

• Significant reduction in cost of goods
• Increasing profitability
• Leveraging synergies between therapeutic portfolios
• Sales performance key to unlocking future growth
• Representation driving growth in existing products
• Have all the products/tools and strategies

− Execution now key

Europe CIS – Commercial strategy and highlights

International

26

Commercial synergies quantified later

• Sales increase of 11%
• Euro increase of 16%
• API sales in 2014 included GSK sales

Objective is to drive increasing sales values/volumes off a decreasing cost base API manufacture

• Sourcing for heparin volumes
• Mucosa sourcing expanded and costs decreased
• Heparin decreases to impact H2 2016
• Relocation of chemical API/intermediates
• Continuing through calendar year 2016

FDF manufacture

• New high speed line validated
• >100m capacity
• Cost efficient and operational from late October 2015
• Third party volume opportunity

Europe CIS – API and FDF manufacture

International

27

• Brazil growth muted by Merck supply issues
• Spanish LatAm
• Strong organic growth in both pharma and nutritional businesses
• IMF & Merck products in for 12 months
• Venezuela classified as hyperinflationary
• Bloom & Nightingale products transitioned to Aspen

Latin America

International

R’million FY 2015 FY 2014 % change Brazil 792 788 1% Spanish Latin America 5 336 2 697 98%

• Nutritional sales

3 078 1 519

103%

Venezuela 1 759 683

158%

Rest of Spanish LatAm 1 319 836

58%

• Pharmaceutical sales

2 258 1 178

92%

Venezuela 945 430

120%

Rest of Spanish LatAm 1 313 748

75% Total 6 128 3 485 76% Revenue by customer geography

28

• Economy unstable and vulnerable
• 97% dependency on oil exports
• Has fixed exchange rate regime
• Application for creditor payments made through a central authority
• Payment erratic and for many non existent
• For now Aspen has enjoyed improved payments

− assistance from the SA government

• IMF are our largest export
• Advance payments will be positive
• Exploring broader opportunities
• Prefer dealing with SA company but looking at alternatives to secure payment

Venezuela

International

29

• Retail to Detail strategy - implemented regionally
• Nutritionals margin improvement
• More to follow
• Anticoagulants injectable responding
• +70% Mexico
• +35% Andean markets

− Tender listings in hospitals

• Launch Aspen controlled pharma sales teams
• Products transferred from distributors to Aspen representation

− Chile, Peru, Ecuador and Colombia

• Caricam in process

− Distributor by distributor − MSD hormonal product transferred Q3 2015

Spanish Latin America – Strategic focus in 2015

International

Mexico Venezuela Uruguay Colombia Panama Caricam Costa Rica Peru Ecuador Argentina Paraguay Bolivia Chile

Aspen subsidiaries Commercialisation

30

• Spanish LatAm excluding Venezuela

Nutritionals performance

International

May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15

Aspen Infant Milk Formulas – LatAm sales in MAT USD excluding Venezuela

Source: IMS Midas Mat USD Apr 15 + ATV (Constant dollars)

MAT in USDm

31

Clear demonstration of capability to grow post patent products

• Global brands continue to perform in USD in spite of currency impact
• MSD portfolio growth impacted by supply constraints

Spanish Latin America – Performance of pharma products

International

• 8.7%

9.7% 13.0% 18.7% 9.2%

• 15%
• 10%
• 5%

0% 5% 10% 15% 20% 25% Growth in %

Spanish LatAm 2015 –transaction overview

MSD PRODUCT PORTFOLIO INITIAL GSK TRANSACTION GSK ONCOLOGY GSK ANTICOAGULANTS NOVARTIS TOFRANOL & ENABLEX

Source: Aspen in market sales for annual period ended 30 June 2015

32

• Private market Pharma growth sustained and accelerating
• ARV growth as Ranbaxy unable to supply their committed tender volumes
• Exchange rate movement negative for operating income
• Consumer propelled by IMFs
• Manufacturing sales – benefited from volume growth and USD denomination

Revenue analysis

South Africa

R’million FY 2015 FY 2014 % change Pharmaceutical Private sector 4 857 4 346 12% Public sector 1 573 1 384 14%

• ARV tender

969 801 21%

• Other tenders

604 583 4% Consumer 1 369 1 116 23% FDF and API manufacturing sales 809 605 34% Total 8 608 7 451 16% Revenue by customer geography

33

All market sectors back to growth - generics remain key growth driver

• Total private market valued at R33.1 billion (+8.2%)
• Leading pharmaceutical company with 16.1% value share
• SEP adjustment of 7.5% in 2015 (2014: 5.8%)

Private pharmaceutical market

South Africa

MAT VALUE SHARE ASPEN MAT GROWTH MKT GROWTH ASPEN 16.1% 9.5% 8.2% ETHICAL 9.6% 10.0% 5.4% GENERIC 29.6% 11.5% 10.5% OTC 11.5% 6.8% 9.9%

Source: IMS June 2015

34

• ARV market share increasing in competitive segment
• Antiulcerant portfolio
• Leadership

Private market pharma

South Africa

Source: IMS TPM June 2015

• Foxair sales performance continues
• Discounted access/volume growth
• Sales greater than Seretide historics

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

MAT value share trend

ASPEN CIPLA MYLAN MERCK & CO NOVAGEN PHARMA ABBVIE ADCOCK INGRAM SANOFI DEZZO TRADING 392 SUN PHARMA BRISTOL-MYERS SQB. HETERO DRUGS 100 000 200 000 300 000 400 000 500 000 600 000 700 000 800 000 900 000 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15

MAT units

FOXAIR SYMBICORD SEREFLO GENTLE SERETIDE VANNAIR 0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

MAT value share trend

ASPEN ASTRAZENECA NOVARTIS TAKEDA DR REDDYS LAB LUPIN LABORATORIES CIPLA ALLERGAN PHARMAPLAN

35

• Aggressive market share gain in 2015
• Market share all-time high in both volume (26.3%) and value (23.3%)
• S-26 stock situation improving

− Returning to growth

• Infacare classic

− Driving category volume growth 10.4% (Cat 3.5%)

• Market volume shares:
• Nestlé 69.6% (PY: 71.6%)
• Aspen 26.3% (PY: 24.5%)
• Abbott 3.2% (PY: 3.1%)
• Other 0.9% (PY: 0.8%)

Infant milk formula

South Africa

25.0 24.5 24.9 24.9 24.3 23.7 23.4 23.7 24.0 24.6 25.1 25.5 25.9 26.3 22.5 23.0 23.5 24.0 24.5 25.0 25.5 26.0 26.5

MAY 2014 JUN 2014 JUL 2014 AUG 2014 SEP 2014 OCT 2014 NOV 2014 DEC 2014 JAN 2015 FEB 2015 MAR 2015 APR 2015 MAY 2015 JUN 2015

Volume share %

ASPEN NUTRITIONALS: VOLUME SHARE

Source: AC Nielsen June 2015

36

• Strategic review of portfolio
• Decision taken to drive focus

− Manage portfolio within increasing compliance requirements − Resource commitment against return − Portfolio review of Aspen’s aspirations therapeutically

• A broad portfolio consisting largely of imported steriles divested
• Will impact future market share

− Aspen’s total value share will drop to 15% − Additional products under consideration − Declutter the facility

• Norgine portfolio acquired

− Key brands include Movicol, Normacol and Agiolax − Not covered by SEP − Commission approval obtained

• Exchange rate implications on profit for private market

− Offset by positive volume growths − ARV tender exchange rate rebased in October

SA strategy

South Africa

37

Winning team, gaining momentum, supplying 1 in 4 scripts dispensed – leaders in both the public and private sector - taking responsibility for a nation’s health

• Aspen private market business continues to perform
• As it has done consistently for the past 17 years
• Rock solid defensively with aggressive growth trajectory
• IMFs had a turbulent start
• Stock outs
• Market share loss exacerbated by delay in Competition Commission
• Aspen IMF business integrated & settled

− Both market share and margins improving − Focus on medical education /scientific differentiation & intra brand synergies

• Aspen has SA’s No 1 brand in private pharma by value
• 2 of top 5 brands
• 5 of top 20 brands
• In generic market segment has No 1 brand

− 3 of top 4 brands − 7 of top 20 brands

SA summary

South Africa

38

• Australian sales impacted
• By both divestments and license terminations

− Particularly in H2 − Principle driver termination of license − Negatively impacted by about 1% against the Rand

• Asia growth trajectory continuing
• Japanese subsidiary operational
• Performance across all territories

Asia Pacific

Asia Pacific

R’million FY 2015 FY 2014 % change Australia and New Zealand 7 217 7 876

• 8%

Asia 1 287 923 39% Total 8 504 8 799

• 3%

Revenue by customer geography

39

• Aspen base and nutritionals showing organic growth
• Low margin licensed products
• H2 steep fall off as low margin Sanofi, Merck and Novartis licenses terminated in December

− Trend to continue

• Impacted by PBS
• Contract manufacture decreased with closure of facilities
• Divestments to realise over AUD400 million

Australia and New Zealand

Asia Pacific

R’million FY 2015 FY 2014 % change Owned pharma brands - continuing 3 429 3 369 2% Nutritionals 975 904 8% Total owned brand sales 4 404 4 273 3% Licensed products 1 217 1 516

• 20%

Contract manufacturing 204 342

• 40%

Total other sales 1 421 1 858

• 24%

Divested products 1 392 1 745

• 20%

Total 7 217 7 876

• 8%

Revenue by customer geography

40

A tough market – funded by government. Aspen well positioned for inevitable consolidation

• As at 30 June 2015
• Market growth of +3.1% to AUD14.6 billion in value
• Driven by volume growth +6.9% primarily generics
• Price decreases

− Net generic pricing would deflate this further

• Aspen in Australia
• 4th with 4.2% value share
• PBS price disclosures
• Cuts continuing
• Further legislative amendments proposed over next 5 years

− Net effect deeper price cuts across the board − May be some upside on OTC

• Government payer of medicines and economy battling

Australia – Pharmaceutical sector

Asia Pacific

Aspen 18% Generic 14% Sanofi 9% AZ 7% Pfizer 7% Alphapharm 6% GSK 5% MSD 5% Boehringer 3% Mundipharma 2% Others 24%

Leading manufacturers by scripts written by GPs

41

Utilising generic skills to manage brand preservation

• Aspen has a strong supply chain
• Good understanding of generic market
• To ensure sustainability
• Focus on volume retentions & growth
• Initial phase
• Increased generic competition

− Pricing decreases − Still growing units − Profit pressure

• Evolved
• Heavy generic competition

− Price bottomed − Brand price premium accepted − Volume & value growth − Sustainable business − Premium gives margin/advantage

Australia – Strategic brand imperatives

Asia Pacific

195 000 200 000 205 000 210 000 215 000 Units MAT Jun 2014 Units MAT Jun 2015 MAT Units

Lamictal +4.8%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0%

Amoxil

Values share Units share

42

• In-market growth remains solid
• Leading domestic brand in-market fuelled by support for locally manufactured products
• Focus on first stage products yielding results

− Gaining new recommendations from educational activities with health care professionals

• NZNM places Aspen in position to leverage growth
• S-26 Gold core variants moving to local production effective October 2015
• Flexibility in supply chain
• Able to supply Asian markets in future
• Accredited for China

Nutritionals continue to perform

Asia Pacific

FY12/13 FY13/14 FY14/15

S-26 Gross sales by channel (AUDm)

Grocery Pharmacy & Hospital Discount Dept Store Others

• Good revenue growth from base
• Innovation - Junior & Comfort variants

− Launched in April 2013 continue to grow

• Diversification of retail channels paying off

− Strong brand support in pharmacies − Additional listings in discount stores

43

• Business was a start up in 2001
• Built on acquisitive & organic growth including licensing
• Innovative, professional commercial strategies employed
• Owned brands
• Aspen base brands
• Acquired Sigma brands
• Infant milk formulas
• Licensed brands
• Lower margin/covered overheads
• Voice in market/credibility
• Sigma
• 5 facilities
• Strong brands but poorly managed prescription business
• Generics business underwater
• Deodorants/nutraceuticals/vitamins and minerals
• Complexity/clutter
• Poor infrastructure/controls & IT systems
• Under pressure with an incoherent strategy/potential liquidation

Aspen Australia summary overview and strategy

Asia Pacific

44

• Since acquiring Sigma
• Integrating businesses

− Both regionally and therapeutically

• Consolidating manufacture and optimising the supply chain
• Driving generic business growth & profitability
• Consolidating OTC and prescription franchises and growing them
• Acquired the Infant milk franchise
• Business now consolidated and settled
• Opportunity to set strategic course and drive focus

− Address complexity & profitability − Address anticipated future market dynamics

• To achieve the above
• Divested to Perrigo – nutraceuticals, deodorants, vitamins and minerals
• Divested to Mylan – imported steriles
• Divested a broad portfolio to Strides
• Discontinued/terminated – numerous multinational license agreements
• Proceeds from the above greater than AUD400 million

Aspen Australia summary overview and strategy

Asia Pacific

45

All objectives achieved and surpassed Complexity and profitability effectively addressed

• Only 1 local manufacturing site
• Remaining sites closed & divested
• Over 2 100 SKUs
• Reduced to less than 600
• Retained 80% of profitability
• Focus on managing own brands
• Resource not distracted
• IMF growth business
• Higher margin base business

− Growing organically

• Assessment of future sales & trajectory
• Use continuing as the base

− Margin impacted by IP ownership jurisdiction − Income impacted by divestment of brands

• Aspen even better positioned for challenges ahead
• Stronger negotiating position for future licensing

Assessment of objectives achieved

Asia Pacific

46

Aspen’s next big frontier

• Revenue growth of 39% and greater than R1 billion
• Driven both organically and acquisitively
• Philippines – 10% growth as licensed products discontinued
• Core products grew at 21%
• Malaysia – 37% revenue growth and Arixtra is now Aspen’s leading product
• Taiwan – 20% revenue growth largely due to launch of Eltroxin line extensions
• Japan almost doubled to R476 million
• Commenced trading

Asian revenue reached R1.29 billion

Asia Pacific

Japan 37% Philippines 19% Malaysia 10% Taiwan 7% Indonesia 7% Hong Kong 5% China 3% Rest of Asia 12%

47

• Revenue growth of 1%
• Normalised EBITA growth of -6%

Revenue analysis

Sub-Saharan Africa

West Africa 54% Southern Africa 11% East Africa 35%

Gross sales R2 777m (2014: R2 752m)

Southern Africa

+18%

East Africa

0%

West Africa

• 2%

Regional revenue growth rates

48

Tough market conditions - particularly currency effect in Nigeria

• Collaboration sales flat year-on-year
• Performance negatively impacted by:
• Supply challenges for key products

− Sales impact > R135 million

• Significant currency devaluation in key markets
• Political unrest and elections in Nigeria which is the most significant market
• Aspen entities performed well despite economic challenges
• Currency devaluation in key markets affected performance

− Shelys business continues to deliver good growth − Nigerian business affected by political unrest and elections

• Continued delivery on strategies

− Brand building in private market − Investment in sales representation and distribution capabilities − Growing IMF business starting to gain real traction up over 40%

• 65% of Kama Industries in Ghana acquired

− Facility & private market products

Performance

Sub-Saharan Africa

49

• Bedded down 3 large/complex transaction groups
• GSK – facility & biological products
• Merck – facilities including biochem facilities & niche products
• Nestlé – IMF across Latin America, South Africa, Australia and facility
• We have achieved
• Settled operating platforms
• Integration & transition
• End to end capability in biochemicals

− Mucosa  syringe

• Access to niche capabilities to exploit in broader geographies

− Women’s health, anticoagulants, CNS, steroids & hormonals

• Challenges
• EHS authorities in Holland

− Site old & technologically challenged

• Cultural fit – multinational to Aspen

− Focus on execution – not second nature

Unpacking operational & strategic synergies

Group

50

• Five key areas for material synergies have been identified these include

Synergies at:

The really big 5 operational synergies

Unpacking operational & strategic synergies

Oss NDB Mono Embolex Infant milk formulas Port Elizabeth

51

• Improvement in technologies/machinery
• High speed line in NDB

− Addresses quality and output

• Moleneid’s unsustainable plants decommissioned/repurposed

− Sustainability, EHS and competitiveness − Increased biochem capacity established

• Procurement savings including components
• Outsourcing of manufacture
• APIs/intermediates to continue moving through calendar year 2016
• Vials to Port Elizabeth by June 2016
• Reduction of heparin pricing
• Mucosa price decreased
• Yield improvements
• Volume increases

Oss and NDB - Cost reduction and capacity initiatives

Unpacking operational & strategic synergies

52

• Increased capacity utilisation
• Third party growth at NDB

− Attempt to increase volumes by at least 50%

• Vaccines manufacturers interested

− Transfer manufacture from slower lines to new line

• API sales growth at Oss

− Major overhaul of commercial strategy − Transferring marketing of FCC from third party to Oss team − Reviewed current pricing and customer profiles − Upside pricing and volume opportunities material − Increased capacity to cost effective base − Resolved technical difficulties on previously discontinued products

• Mono Embolex
• Savings from

− API − Manufacturing transfer − Consolidating components with Aspen’s existing supply

Oss / NDB and Mono Embolex – Commercial initiatives

Unpacking operational & strategic synergies

53

Targeted operating income effect not less than R2.5 billion

• IMF
• Reduction in COGS

− Global procurement − Commodity decreases − Operational expenses

• Port Elizabeth
• Volume throughput

− Sterile vials/amps now online − Contained suite

• Objective to realise majority of synergies
• FY2016 – FY2018
• Excluding one off costs

− Operational synergies anticipated in each year − Benefit weighted to H2 2017 & 2018 − Full year effect FY2019

Quantifying the synergies

Unpacking operational & strategic synergies

54

We now have a plan for the world’s largest market

• In addition to existing IP
• Aspen acquired and developed broad IP/technological capabilities
• Increased emphasis/focus on the USA
• Base business is performing
• Scope for substantial improvement
• Leverage existing IP
• Key registrations anticipated
• Dossiers acquired/developed
• Danaparoid progressing well

− API validation trials anticipated next four months

• Narrow focus
• Driven therapeutically
• Aspen has global advantages

− API capabilities/key driver

• Aspen has exclusivity or limited competition

USA opportunity

55

• Aspen has had another successful year
• 34th consecutive growth report
• In spite of negative currency headwinds
• Revenue +22%
• Normalised HEPS +15%
• Cash from operating activities +26%
• In addition to achieving the above
• We have settled & transitioned complex multibillion dollar acquisitions
• Divested over USD800 million globally
• Completed transactions
• Reduced complexity
• Address compliance
• Reduce bureaucracy
• Increase focus
• Considering further divestments – less material

Summary and Prospects

56

• Aspen continues to drive focus
• Key therapeutic areas
• Intention global/regional leadership
• Seamlessly manage complexity
• Leverage operational/technical skill base
• Deliver on synergies
• Global industry is dynamic
• Significant M&A activity
• Aspen extremely well positioned
• We continue to review IMF opportunities in Asia
• China is a key destination

− Significant churn − Market dynamics shifting − Pricing pressure/e-commerce − Significant government intervention − Pricing/risk consider the above

Summary and Prospects

57

So we have stayed busy & will continue to as Rest is Rust

• Reviewing broad strategic opportunities/partnerships in Pharma
• Complement/enhance existing strengths
• Clarity/give focus to future strategic direction
• Aspen’s strength however is
• Not dependant on inorganic activity for growth
• Significant organic opportunity

− Over R2.5 billion in operational synergies identified − Opportunity in new markets – e.g. the USA − Opportunity (for sustained organic growth with current) niche products − Volume increases in Emerging markets

Summary and Prospects

END

This presentation has been prepared by Aspen Pharmacare Holdings Limited based on information available to it as at the date of the presentation. This presentation may contain prospects, projections, future plans and expectations, strategy and other forward-looking statements that are not historical in nature. These which include, without limitation, prospects, projections, plans and statements regarding Aspen's future results of operations, financial condition or business prospects are based on the current views, assumptions, expectations, estimates and projections of the directors and management of Aspen about the business, the industry and the markets in which Aspen operates. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and

• ther factors, some of which are beyond Aspen’s control and are difficult to predict. Actual results, performance or

achievements could be materially different from those expressed, implied or forecasted in these forward-looking statements. Any such prospects, projections, future plans and expectations, strategy and forward-looking statements in the presentation speak only as at the date of the presentation and Aspen assumes no obligation to update or provide any additional information in relation to such prospects, projections, future expectations and forward-looking statements. Given the aforementioned uncertainties, current and prospective investors are cautioned not to place undue reliance on any

• f these projections, future plans and expectations, strategy and forward-looking statements.

Cautionary regarding forward-looking statements

Disclaimer

Appendices

Appendix 1: Group statement of financial position Appendix 2: Extract from Group statement of cash flows Appendix 3: Segmental revenue and normalised EBITA Appendix 4: Institutional investors Appendix 5: Corporate activity Appendix 6: Expansion of Aspen footprint in Sub-Saharan Africa Appendix 7: Asia Pacific – Japan entity

60

61

Group statement of financial position

Appendix 1

R’million FY 2015 FY 2014 ASSETS Non-current assets 55 680 51 334 Property, plant and equipment 7 917 7 151 Intangible assets 40 522 35 699 Goodwill 5 026 6 641 Contingent environmental indemnification asset 677 727 Other non-current assets 1 538 1 116 Current assets 32 737 31 213 Inventory 10 791 10 275 Receivables and other current assets 10 390 9 661 Cash 8 666 8 226 Assets held-for-sale 2 890 3 051 Total assets 88 417 82 547 R’million FY 2015 FY 2014 EQUITY AND LIABILITIES Share capital and reserves 34 162 28 876 Non-current liabilities 32 477 37 629 Borrowings 25 492 29 915 Contingent environmental liability 677 727 Unfavourable and onerous contracts 2 112 2 639 Deferred tax 1 669 1 351 Other non-current liabilities 2 527 2 997 Current liabilities 21 778 16 042 Borrowings 13 222 8 075 Trade and other creditors 6 785 6 884 Unfavourable and onerous contracts 315 335 Other current liabilities 1 456 748 Total equity and liabilities 88 417 82 547 As at 30 June As at 30 June

62

Extract from Group statement of cash flows

Appendix 2

R’million FY 2015 FY 2014 Change Cash operating profit 9 507 7 911 20% Changes in working capital (1 467) (2 187) Cash generated from operations 8 040 5 724 40% Net finance costs paid (2 007) (709) Tax paid (1 194) (1 178) Cash generated from operating activities 4 839 3 836 26% Normalisation adjustments 184 72 Normalised cash generated from operating activities 5 023 3 908 29% For the year ended 30 June

63

Segmental revenue and normalised EBITA

Appendix 3

23% 18% 40% 49% 13% 37% 27% 21% 55% 35% 24% 23% 9% 10% 9% 7% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% FY 2010 FY 2013 FY 2014 FY 2015

Gross revenue by region

International Asia Pacific South Africa Sub-Saharan Africa 31% 27% 47% 56% 6% 34% 25% 19% 60% 35% 24% 21% 3% 4% 4% 4% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% FY 2010 FY 2013 FY 2014 FY 2015

Normalised EBITA* by region

International Asia Pacific South Africa Sub-Saharan Africa

64

Institutional investors

Appendix 4

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% June 2011 June 2012 June 2013 June 2014 June 2015 Southern Africa North America Europe Asia Pacific Middle East

65

• Disposal of Fondaparinux molecules in the United States to Mylan
• Prompted by lack of knowledge of the US generic sector
• USD300 million consideration
• Acquisition of 50% of New Zealand New Milk
• Supply of infant milk formula for distribution in Australia
• Holds the endorsements required to supply infant milk formula to China
• Investment in TesoRx
• Oral testosterone treatment at phase 2 trials development stage
• Will strengthen existing testosterone portfolio
• License rights for Latin America, Africa, Asia Pacific, Russia and CIS
• Maximum investment of USD95 million
• Mono-Embolex
• Addition to anti-coagulant offering with strong German presence
• Weight independent dosing
• Purchase consideration of USD142 million
• Revenue of EUR68 million in 2013

Corporate activity

Appendix 5

66

• Disposal of generics business and certain branded products to Strides
• Aspen Australia divested approximately 130 products for approximately AUD217 million
• 2015 revenue of R1.2 billion
• Aspen Global divested six branded products for approximately USD79 million
• 2015 revenue of R80 million
• Both transactions effective 31August 2015
• Disposal of a portfolio of products in South Africa to Litha
• Largely injectables and established brands
• Consideration of approximately R1.6 billion
• 2015 revenue of R475 million
• Completion expected on 30 September 2015
• Acquisition of Norgine (Pty) Ltd in South Africa
• Portfolio of branded gastro-intestinal products
• Consideration EUR29 million
• 2014 proforma revenue of R98 million
• Completion expected on 30 September 2015

Corporate activity (continued)

Appendix 5

67

• Kama Industries Limited
• Established and reputable business based in Accra, Ghana
• Acquired 65% of business for USD4.5 million
• Effective 1 May 2015
• Revenue of R2.3 million for FY2015
• Options to acquire the remaining 35% over time
• Strong in the liquids market
• Established brands in OTC segment
• Produces its own products at the factory in Accra
• Strategic rationale
• West Africa identified as significant growth region
• Kama has strong presence in Ghana with established private market brands
• Increases Aspen footprint in SSA
• Local production to meet local needs
• Conduit for Aspen products

Expansion of Aspen footprint in Sub-Saharan Africa

Appendix 6

68

• Japan
• Commenced trading on 1 July 2015
• In the process of finalising a collaboration arrangement with GSK to launch authorised generics

− Rapidly expanding sector − Driven by government’s initiative to manage escalating healthcare costs − Registration of authorised generics and preparation for launch

• China and other Asian markets – continue to look for opportunities in IMF and pharma
• Shifting market dynamics in China IMF mean market is battling and under pressure

Asia Pacific – Japan entity

Appendix 7